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Former Member

TDS calculation on advances

Hello All

I need to test for one of my client whether is TDS calculated by SAP or not?

For this I have checked the Tax codes assigned to company codes in SPRO and other requirement like Extended with holding tax calculation should be activated etc. In essence, I have checked the TDS configuration in SPRO and confirmed that it is automatic, But the problem starts because now my client is saying that for some vendors they do advance payment on Proforma Invoice and deduct TDS; while during final payment they deduct balance TDS depend on invoice.

Can someone tell me how to test such thing in SAP. Is there any config in SPRO that we can check?

Warm Regards

Aditya

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5 Answers

  • Best Answer
    Feb 26, 2015 at 04:55 AM

    Hi Aditya,

    As per my understanding, first you want to deduct TDS on advance payment and you do not want to deduct TDS on invoice but what ever balance you paid to vendor, on this you want to deduct the remaining TDS. If yes, then you have to follow below steps:

    1. First post down payment by selecting the withholding tax type for payment

    2. Later you post invoice, here you have to select only withholding tax type for payment code and deselect the w.h.tax type for invoice, if it has selected. Here system wont deduct TDS.

    3. After that, you do balance payment posting by F-53/F-58/F110. Here system will deduct the TDS amount on balance amount.

    Regards,

    Mukthar

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    Former Member
    Feb 25, 2015 at 08:16 PM

    Hi Aditya,

    Pre-requisites:

    1. WHT tax type should be created (at invoice or at payment)

    2. WHT tax code should be defined and assigned to tax type

    3. Assign the WHT tax type and code to the vendor master

    Steps to test:

    1. Post a down payment request using F-47

    2. Post downpayment using F-48 or F110

    3. In this document, TDS should have been deducted assuming the pre-requisites are maintained correctly.

    4. Post an Invoice using FB60 or MIRO

    5. If WHT type is at the time of invoicing, TDS will be deducted after the document is posted. The net effect of TDS deduction can then be checked in the TDS G/L balance.

    Hope this helps!

    Regards,

    Chetan

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    Former Member
    Feb 25, 2015 at 12:24 PM

    Hi,

    If i understood your requirement properly, then in SAP Ext.W/Tax  - can specify the tax types as during invoice or payment. And in vendor master data -> withholding tax tab need to mention the proper tax types, code and liable check box. Using these settings above reqt. can be met. Pls. check.

    Cheers,


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  • Feb 25, 2015 at 12:37 PM

    HI Aditya,

    Please follow the below.

    1. use EWT concept, 2. configure Payment tax type and code and also Inv tax type and code.

    3. Assign both to vendor master 4. post DP at F-48 or F110 5. Post Invoice 6. DP clearing

    7. Final payment.

    Careful : F-48 full TDS, f-43 full TDS, F-54 DP clearing with TDS reversal on DP. F-53 No TDS.

    set 'Central Inv Pro" option for payment tax type.

    Regards

    Madhu M


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    Former Member
    Feb 26, 2015 at 06:26 AM

    Hi Aditya,

    TDS is paid at the time if Payment or Invoice which ever is earlier, so if you are making Advance / prepayment, you need to Post TDS.

    for e.g. say you paid Advance of 100 Rs and it is liable to 10 % then you can post like below :

    Vendor A/c...Dr.                  = 100 Rs    

         Bank Clearing A/c         = 90 RS

         TDS A/c                         =10 Rs

    you can post this entry through F-02 and here you can get option to select WHT tax code in tab "withholding tax code data"

    one you recieve Invoice, post it without deducting TDS. this you can do it by removing WHT tax code while posting an invoice.

    Expense A/C Dr.      =     100 Rs

         vendor A/c Cr.     =    100 RS

    lateron you can clear vendor ledger through T code F-44

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